Global Fuel Markets on Brink as Wars Exacerbate Shortage Crisis
The global fuel market is facing unprecedented pressure due to ongoing wars in the Middle East and Europe. According to Amrita Sen, co-founder and director of market intelligence at Energy Aspects, there is currently 'zero slack' in the system.
Sen attributed this situation to a lack of refining capacity, which has been exacerbated by the Iran war and its impact on oil supply. The US and Israel's conflict with Iran has led to the largest oil supply disruption in history, causing prices to soar.
The shortage is particularly pronounced for diesel, a critical fuel component in many industries and economies. As Morgan Stanley analysts noted, Europe is at the epicenter of this crisis, with margins for turning oil into diesel hitting fresh records daily due to depleted inventories.
Russia's refining infrastructure remains a key bottleneck, with Ukrainian forces carrying out frequent attacks on Russian refineries since April. This has pushed Russia's crude-processing rates to multi-year lows and triggered a nationwide fuel supply crunch.